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Public and private roles in road infrastructure: an exploration of market failure, public instruments and government failure

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  • Mark Lijesen
  • Victoria Shestalova

Abstract

Starting with a 'greenfield' situation, we discuss reasons for market failure in road infrastructure provision. We show why it may not be optimal from a welfare perspective to leave road provision fully to the market and government intervention in this sector can improve welfare. Government intervention comes in different forms, such as financial intervention (taxation, subsidies), regulation (price, quality, environmental), and public provision of roads or road services. The analysis of the literature regarding government instruments allows us to establish a correspondence between different forms of market failure and instruments. Several case studies of particular road infrastructure projects are included to illustrate the use of government instruments.

Suggested Citation

  • Mark Lijesen & Victoria Shestalova, 2007. "Public and private roles in road infrastructure: an exploration of market failure, public instruments and government failure," CPB Document 146, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:docmnt:146
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    References listed on IDEAS

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    1. Fabrizio Altarelli & Alfredo Braunstein & Luca Dall’Asta, 2015. "Statics and Dynamics of Selfish Interactions in Distributed Service Systems," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-29, July.

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    More about this item

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • H4 - Public Economics - - Publicly Provided Goods

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